Re: Refuting supply-side economics

From: Some Guy (bc76_at_midmaine.com)
Date: 09/13/04 

Date: 13 Sep 2004 05:31:35 -0700

drr0cket@yahoo.com (Bodhisattvacat) wrote in message news:<4f2532f6.0409121022.4dbcdef4@posting.google.com>...
> The idea that paying for tax cuts with deficit spending helps the
> entrepreneur, is sheer nonsense. As government debt builds, the
> investor finds it more profitable to buy federal bonds rather than
> invest in the productive sectors of the economy. The entrepreneur thus
> is denied the capital he needs to start and expand his business. So
> that, although he has lower taxes, he is left in a much worse position
> than he was before.
>
> The economy with high public debt becomes sluggish, unwieldy and weak.
> It is leeched of investment capital and makes businesses a lot harder
> to expand and develop. The high-tax, no-deficit Clinton economy was
> able to grow fast, because there was capital available for its
> development. The low-tax, high-deficit Bush economy is stagnant,
> because the investment funds are denied the businessman and all go into
> buying government bonds.
>
> I don't know why Democrats haven't said anything to this effect. I hate
> to be the only person I know who has thought of this obvious fact. It
> is not a difficult concept to explain to American people.
>
> Bush is screwing the entrepreneur, and he is screwing my generation.
> With $2000 per person per year in added federal debt, America will not
> be able for long to maintain its vibrancy without going through some
> very painful times. Reagan had an excuse; he had a Democratic Congress
> and a Cold War. But Bush has a Republican Congress and two minor
> conflicts with very weak enemies that together cost $100 billion a
> year. For him to be running $500 billion a year deficits, is
> inexcusable.

I posted something along these lines recently:
http://groups.google.com/groups?start=50&hl=en&lr=&ie=UTF-8&group=sci.econ&selm=667d0677.0409091223.2d1722b5%40posting.google.com

Probably others have come to the same conclusion before either of us..

The only logic for cutting capital gains taxes as a supply side
measure rather than reducing the deficit, or even paying down the debt
is that reducing taxes means that there is less money for the
government to spend. The Republican thinking might be that this will
eventually reduce the size of government which is a stated goal of
Republicans.

But what supply sided policies has Bush implemented? None that I know
of. His tax cut was for the middle class. If anything, it was demand
sided - which was precicely what was needed. Clinton's economy had
tons of capital because of noexistant deficit, and it was invested in
some rather hair brained schemes ( certain tech stocks for instance ).
 Many of these hair brained schemes didn't pan out and fell apart.
People lost their jobs, and spending decreased. The Fed barely
avoided having do fight deflation.

If anything the economy of the last few recession years resembled a
very mild version of The Great Depression more than another late 1970s
/ early 1980s stagflation. The recessions may be two sides of the
same coin - supply sided recessions and demand sided recessions. But
that is just talking out of my ass.

I'm not sure if the War in Iraq helped employment - ammo was already
stockpiled, and there was no draft. But if the war had blown up, it
would have probably provided a bigger economic boost. War would have
made the economy of the 1980s worse because it would divert capital
resources from needed civilian investments.

One thing I didn't see Bush do was to implement government run
infrastructure programs like road repair etc. Really, we are getting
back on track, and it was probably not neccessary.

IMHO, Bush has actually done well on the economy.

And Bush did the right thing by going to war in Afghanistan, but
should have invested more heavily in building it back up again into
something resembling stable. I can't

But I hate Bush for wasting 200 billion dollars *so far* in Iraq.
That's about $800.00 from every man woman and child in the US to
fight a war that has nothing whatsoever to do with Terrorism. Iraq
was not a bastion of terrorists. All fighting that war did was piss
the terrorists off more by putting more US troops into the Middle
East.

And since every atrocity ( or action that is CONSIDERED an atrocity by
the Middle Easterners ) strengthens the terrorists we have played
right into the terrorist's hands by striking the "innocent" ( of
terrorism at least ) regime of Saddam Hussein. That's what terrorists
do, they provoke you into harming innocents to increase their own
recruitment making them stronger. The best way to handle terrorists
is to attack them if you can target them exactly, and turn the other
cheek. Do not let them rise above the level of common criminal by
considering them worthy of Collective Punishment type reprisals.

Even peaceful sorts use this strategy of purposely provoking
reprisals. Consider Ghandi, or MLK Jr. Police beatings of protesters
etc cause simpathy to sway toward the protesters increasing their
numbers. War damaged mosques, dead Iraqis, and other collateral
damage will always work in the 'terrorists' favor.

Saddam Hussein was a Bad Guy(TM) and he deserved what he got. And we
did the Iraquis a favor by ousting him, though it remains to be seen
whether they will appreciate this and be able to form a better state
than Saddam's. But how many Somali/Sudanese/Congan/whatever 2-bit
bananna republic genocides could we have stopped for the same money?
Not that I am saying that we should meddle in 2-bit wars around the
world - we shouldn't. But instead of forcing me the taxpayer into to
going into debt for the sake of Iraqis why not let me keep the
$800.00 and decide for myself whether I want to donate it to the World
Police Fund. You can bet that neither I nor most of the public would
donate $800.00 to some poor shlobs in some other country who they've
never met if given the choice. I don't give the the feed the
Ethiopans fund either,at least not $800.00!

And Bush is in the pocket of the Christian Right. And Bush pushes
Patriot Acts . The atheist, card carrying ACLU member in me doesn't
like him for those reasons either.

So I will vote Kerry, even though he has played his cards close to his
chest, so as to be the 'Not Bush' candidate. I have no idea what he
is for and against, but it will probably not be wars, religious
inspired laws to inhibit my freedoms to commit sins against a God I
don't believe in, and hopefully, he's smart enough to keep the economy
headed in the right direction.

And if Bush gets reelected in 2004? Then the Republicans will have to
run an unknown in 2008. That unknown will run against Hillary Clinton
with a populist public run health care for all platform and lose. If
Kerry is elected, Hillary Clinton will never be president. Universal
Health Care is a powerful issue even for people like me who don't like
big government.

Now, I have no illusions about public run health care for all being as
good as private health care paid for by insurance from one's
workplace. I'm sure Canada Health sucks, and it is just about what
the US would have if health care were government run. But then again,
why should the US health care consumers pay for all drug and medical
device R&D because as individuals we don't have the price negotiating
power that most other civilised countries do?

I happen to have health insurance. I am better off than a Canadian.
But then again, people I care about do not have health insurance, and
I can not afford to buy it for them. I would sacrifice my own
private insurance health care plan and take Canada Health for myself
if it meant those uninsured people I care about could *have* Canada
Health.

Therefore as a pragmatist, I must be FOR universal health care in the
US. Also, as a middle class person who already pays for the
healthcare of those who can not afford it in the form of higher
insurance premiums needed to pay for inflated hospital bills cause by
bad medical debt from treating the uninsured, I would like to shift
some of that cost to the more wealthy by having healthcare payed for
by a 'progressive' tax. I might even see a pay hike from a universal
health care system being implemented since my employer would no longer
have to pay for it, and I would no longer have to chip in ( except at
tax time - let's make it a VERY progressive tax hehe )

In summary, I am voting for Kerry because of Iraq even though Bush has
handled the economy well ( Accidentally? We will never know.. ), and
despite the fact that I WOULD like to see Hillary Clinton elected in
2008 so that the US might get a Universal Health Care system.

Relevant Pages

  • Re: Refuting supply-side economics
    ... As government debt builds, the ... >> Bush is screwing the entrepreneur, and he is screwing my generation. ... But if the war had blown up, ... > with a populist public run health care for all platform and lose. ...
    (sci.econ)
  • Re: House passed health care reform...
    ... Hell, if the majority wants government to nationalize health care, ... The polls are very clear in that Americans want health care reform. ... Everything is fubar because Bush ...
    (rec.boats)
  • Re: House passed health care reform...
    ... Hell, if the majority wants government to nationalize health care, so ... The polls are very clear in that Americans want health care reform. ... Everything is fubar because Bush ...
    (rec.boats)
  • Re: House passed health care reform...
    ... Hell, if the majority wants government to nationalize health care, so ... The polls are very clear in that Americans want health care reform. ... Everything is fubar because Bush ...
    (rec.boats)
  • Re: OT: Official Why Zarqawi and why now? thread
    ... One more example of the government providing what the overwhelming ... George Bush stated that the social security system would fail ... Even if there are no changes at all to promised benefits and FICA tax rates ... and health care costs are spiralling out of control. ...
    (rec.gambling.poker)
Quantcast